E-commerce App Poshmark Fetches $25 Million To Avoid 'Nuclear Winter'

It is not a great time for e-commerce startups. As funding has dried up for private tech companies, those in the online shopping space have not fared particularly well. Some have been able to raise money to stay afloat, albeit at lower or flat valuations. Others have sold at steep discounts to recoup investor money or shutdown completely.

Manish Chandra has surveyed the landscape and knows it's not pretty. As the founder and CEO of women's social commerce site Poshmark, he said that the bodies in the e-commerce graveyard will continue to accumulate, but hoped his company will be one of the survivors. On Wednesday, the company moved toward that goal by announcing it had raised $25 million in a round led by GGV Capital and existing investors.

"Companies like Gilt Groupe, that affected us, and things like Zulily going from $4 billion to $1 billion," said Chandra when asked about the investor perception of e-commerce companies. "But our customer proposition and our positioning hasn't changed over the years."

Founded in 2011, Poshmark is a marketplace with a dedicated app where users can send and share outfits as well as buy and sell used clothing. Chandra said that the app's users are almost 100% women, and that there is now 1.5 million people selling on the platform. (He did not say if those were active or registered users.)

While Poshmark's CEO noted that "one in 50 women in America have opened a shop on Poshmark," he was also cagey on other figures. He declined to given active user counts and said that annual gross merchandise volume, or the value of all good transacted on the app, was now in the "hundreds of millions of dollars." Chandra declined to disclose the company's valuation, and only said that the round of funding came at a higher price than its last round in 2015 when it also raised $25 million.

Over its lifetime, Poshmark, which has about 100 employees, has raised more than $70 million in the face of competition from other startups in the used-clothing space including The RealReal, Tradesy and
thredUP. Unlike the others, however, Poshmark is trying to differentiate itself with a more social app where Chandra said users are uploading or sharing more than 3 million items a day. The company is also slowly allowing boutique brands to sell merchandise on the platform and Chandra hopes to have 500 relationships by the end of the year.

With the money, Chandra said Poshmark may push into men's fashion and explore international expansion in English-speaking countries like Canada, Australia and the United Kingdom. GGV Capital, which is well-connected in China, may also eventually facilitate developments in Asia. GGV's Hans Tung, who is also an investor in mobile shopping app Wish, joined Poshmark's board in the deal.

“By building a platform that supports its community, the company has been able to foster a uniquely scalable shopping environment where sellers can build social influence to help drive discovery and sales," said Tung in a statement.

Chandra knows Poshmark is nowhere near the finish line but he likes his odds. The company has the biggest balance sheet in its history, he said. "If a nuclear winter happens, we’re prepared for anything."